(April 10, 2013) — Billionaire speculator George Soros has urged German chancellor Angela Merkel to quit the euro to help the single currency survive.
In a lively speech delivered on Tuesday in Germany’s financial centre of Frankfurt, Soros told the audience the country had gone too far during the bailout of Cyprus, that Germany was heading for a recession and that it should either leave the euro or reverse its long held opposition to eurobonds.
Eurobonds were a suggested form of sovereign debt that would mean each member country’s borrowings were guaranteed by the entire Eurozone.
“My first preference is eurobonds; my second is Germany leaving the euro,” the Guardian reported him saying.
“It is up to Germany to decide whether it is willing to authorise eurobonds or not. But it has no right to prevent the heavily indebted countries from escaping their misery by banding together and issuing eurobonds.
“In other words, if Germany is opposed to eurobonds it should consider leaving the euro and letting others introduce them.”
The fiery hedge fund manager also told the audience that “austerity doesn’t work” and that Germany would be forced into recession as “the monetary policy pursued by the eurozone is out of sync with the other major currencies… [because] the others are engaged in quantitative easing”.
Soros recognised that a German exit would result in the value of the euro falling, but he argued this could be a positive thing as the countries in most debt would regain their competitiveness.
“Their debt would diminish in real terms and, if they issued eurobonds, the threat of default would disappear. Their debt would suddenly become sustainable … and Europe would escape the looming depression,” he added.
Soros made his name in 1992 by making $1 billion (£650 million) in a bet against the pound as it was forced from the Exchange Rate Mechanism .
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